U.S. News

FCC Approves AT&T's Buyout of BellSouth


The Federal Communications Commission unanimously approved AT&T's $86 billion buyout of BellSouth on Friday. The FCC's approval was the last major regulatory hurdle for the proposed deal, which is the largest telecommunications merger in U.S. history.

Lawyers for AT&T and the two Democratic commissioners who had opposed the merger hammered out a compromise, the details of which were released Thursday night.

Among the conditions offered by AT&T is a promise to observe "network neutrality" principles, an offer of $19.95 per month stand-alone digital subscriber line service, and a vow to divest some wireless spectrum.

AT&T offered the concessions after a little more than a week of marathon negotiations with lawyers who work for the two Democrats on the commission, Michael Copps and Jonathan Adelstein.

Adelstein said Friday he was pleased with the agreement.

"We got substantial concessions that are going to mitigate a lot of the harms that would otherwise have resulted from this merger," he said.

Ben Scott, legislative director for Free Press, a reform group that has fought the merger, said the network neutrality provision was a "big step forward for the supporters of an open Internet."

The creation of the new telecommunications giant was approved by the Justice Department on Oct. 11 without conditions.

After the Oct. 13 offer of concessions from AT&T, negotiations stalled. Martin, declaring an impasse, asked the agency's general counsel to issue an opinion on McDowell's status, a move that drew harsh criticism from Democrats.

General Counsel Sam Feder issued his opinion, but McDowell called a press conference soon after announcing he had no intention to vote, saying that he was being used "as a pawn to forgo meaningful and sincere negotiations."

The combination of San Antonio-based AT&T and Atlanta-based BellSouth would have operations in 22 states. AT&T estimates that about 10,000 jobs would be phased out over three years.

Combined, the companies generate about $117 billion in revenue and operate 68.7 million local phone lines stretching coast to coast across the southern United States and up through the Midwest.

The buyout will also give AT&T complete control over Cingular Wireless, the nation's largest wireless telecommunications provider, which it owns in partnership with BellSouth.